Monday, September 29, 2008
I had written a basic primer on How to run a board meeting nine months ago and have been pleasantly surprised that it continues to be one of the more popular postings. But it's just the basics and I've been working through some more sophisticated challenges recently.
FirstRain sells to both financial services and corporations. Most of our financial services clients are on the buyside, but even the buyside is not immune to the fear running through the markets - and they are reacting to unprecedented volatility so they understandably get distracted. We have been discussing what strategy and tactics to pursue to keep our business growing in difficult times for our customers. And of course this is a subject of great discussion at our board.
We had a regularly scheduled board meeting last week and in preparing two weeks before I found myself consciously stepping back and thinking about how to make the meeting as useful as possible for both FirstRain and the board members given the challenges our financial customers are facing. And this led me to develop a set of additional points on how to run a board meeting in a market crisis.
1. Stay grounded in strategy. You put the strategy in place for a reason but in times of trial not everyone remembers. If you start the discussion with a refresher - what your strategy is and why - and whether any fundamentals have changed that materially impact the strategy - it creates a good grounding for the board discussion. What problem you are solving - who you are solving it for - what market discontinuities you are leveraging and - what products and technology you are building as a result.
2. Review the facts of the crisis - what's happening, what is the hard evidence and how does it interact with your strategy. Review how your supply chain and/or your customers are affected.
3. Prep the board members for the discussion - as I said in point #6 of my prior post, board members don't like surprises. Get your agenda out 8-10 days before the meeting, outline what you think needs to be discussed and then call them in advance to make sure you have their input and you get them thinking about the critical issues before they come to the meeting.
4. Make sure you get everyone's input, especially if you have to make a material decision. If someone can't come to the meeting ask them to call a few key board members in advance to share their opinion or ask them to send an email summarizing their opinion to the rest of the board.
5. Be clear about what the real choices you face are. Boards do better when you lay out the strategy, the facts around the challenge you are facing and then options A, B or C. That way they can engage and advise you, and while they may come up with an option D which is even better than the choices you gave them you're more likely to have a productive discussion with some structure.
6. Create opportunities during the meeting to tap into their creativity. If you are trying out new product ideas describe them and use board members experience to help you refine them or break you out of a rut.
In FirstRain's case our customers need information now more then ever. The CEO and CMO needs to understand the ripple effects of the credit and stock market crunch on their markets and competitors, the portfolio manager needs information in cratering markets even more so than in a bull market. As one of my board members fascetiously said to me - "You should tell prospects it's irresponsible not to have FirstRain in this environment". Somehow I don't think that would be a very effective sales pitch. But revisiting the strategy helped remind us all of the discontinuities that help us: the decline of the sellside will accelerate now, and the web is noisier than ever, making a platform that can create alternative research from the web even more critical.
In the end I believe that unless whatever challenge you are facing changes your fundamental assumptions about your market and solution, unless that is the case you should stay the course with your strategy. Change tactics, try new ideas, but stick with the fundamental strategy. And experienced boards will support you if you are executing and the market needs your product.